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/raid1/www/Hosts/bankrupt/CAR_Public/030724.mbx C L A S S A C T I O N R E P O R T E R Thursday, July 24, 2003, Vol. 5, No. 145 Headlines BREAST IMPLANTS: FDA Urged To Consider Carefully Lifting Ban CREDIT CARDS: 8 Million Notices Sent Out in Landmark Settlement DOW CHEMICAL: Court To Rule on Certification For Residents' Suit FAX.COM: CA Attorney General Files Civil Suit For Unwanted Faxes FLORIDA: 18 Charged With Prescription Drug Racketeering, Fraud GREEN TREE: Agrees To Settle MN Securities Lawsuit For $12.5M HOME DEPOT: FL Court Refuses to Certify CCA-Treated Wood Lawsuit I2 TECHNOLOGIES: Investors Commence Securities Suits in N.D. TX I2 TECHNOLOGIES: Faces Shareholder Derivative Suits in N.D. TX I2 TECHNOLOGIES: Faces Shareholder Derivative Lawsuit in N.D. TX I2 TECHNOLOGIES: Plaintiffs Appeal Dismissal of Derivative Suit IDAHO: Agriculture Director Says No Alternative to Field-Burning L90 INC.: Agrees To Settle For $5M Securities Lawsuit in C.D. CA L90 INC.: Plaintiffs Ask CA Court To Allow Appeal of Dismissal L90 INC.: Reaches Settlement For CA Shareholder Derivative Suits SILICON LABORATORIES: Plaintiffs Push MOU To Settle Stock Suits SUNOCO INC.: Judge Grants Certification To Civil Rights Lawsuit TRILLIUM BANQUET: Faces Suit For Students Infected With E. Coli UNITED STATES: CA Group Speaks Out Against Class Action Abuse UTAH: Legislature Cuts Foster-Care Review Board's Budget In Half WOODWARD GOVERNOR: Employees File Race Discrimination Suit in IL New Securities Fraud Cases ADMINISTAFF INC.: Marc Henzel Lodges Securities Suit in S.D. TX CENTRAL PARKING: Marc Henzel Files Securities Lawsuit in M.D. TN CROMPTON CORPORATION: Brodsky & Smith Lodges CA Securities Suit CROMPTON CORPORATION: Marc Henzel Lodges Securities Suit in CA CROMPTON CORPORATION: Charles Piven Lodges Securities Suit in CA GUIDANT CORPORATION: Marc Henzel Launches Securities Suit in IN LABORATORY CORPORATION: Charles Piven Files Stock Lawsuit in NC READ-RITE CORPORATION: Wechsler Harwood Files CA Securities Suit SINGING MACHINE: Vianale & Vianale Lodges Securities Suit in FL STOCKWALK INC.: Zimmerman Reed Launches Securities Lawsuit in MN ********* BREAST IMPLANTS: FDA Urged To Consider Carefully Lifting Ban ------------------------------------------------------------ Consumer groups are asking the United States Food and Drug Administration (FDA) to follow stringent standards while considering whether to lift its ban on the sale of silicone-gel filled breast implants, the Associated Press reports. The FDA is considering implant manufacturer Inamed Corporation's request to let it sell its version of silicone implants. The FDA will likely seek recommendations from its scientific advisers before deciding, but has said its primary consideration will be how well women fared in the two years after getting silicone implants. In the 1990s, thousands of women alleged that the implants gave them serious diseases, such as arthritis and cancer. In 1992, the FDA banned silicone implants. The agency however allowed the sale of saline-filled implants, as long as women were warned that they were prone to leaking and deflating, requiring more surgery. In 1999, however, the influential Institute of Medicine revealed that silicone implants don't cause major diseases, although they break relatively often. Further research showed that silicone implants begin leaking about seven years after they receive them. "The FDA is simply not looking at enough information to reasonably assure women that silicone gel breast implants are safe in the body over many years," NOW President Kim Gandy, who urged the agency to require years of additional data told AP. Dr. Celia Witten, FDA's chief of implanted devices, responded that the agency always considers whatever long-term safety data are available before deciding a product's fate. CREDIT CARDS: 8 Million Notices Sent Out in Landmark Settlement --------------------------------------------------------------- More than 8 million notices have been sent out to participants in the historic and landmark settlement of an antitrust case against Visa U.S.A. Inc. and MasterCard International, Inc. More than six years ago, in October of 1996, the merchants filed suit against MasterCard and Visa because they were attempting to monopolize the debit card market just as they have monopolized the credit card market. The merchants also challenged Visa and MasterCard's enforcement of their "Honor All Cards" tying rule, which illegally forced merchants who accept their credit cards also to accept their slow, fraud-prone, excessively priced and deceptively designed debit cards. The case was certified as a class action in February of 2000, and the trial was set to commence on April 28, 2003, following the defendants' unsuccessful appeals of the class certification decision and supplementation of summary judgment motions. On the eve of trial, the parties agreed to the settlements. Final settlement agreements were signed on June 4, 2003 and the federal judge overseeing the case, Judge John Gleeson, granted preliminary approval to the settlements and the notice plan on June 13, 2003. Any objections to the terms of the settlements and plan of allocation are due to be filed by September 5, 2003, and a fairness hearing will take place on September 25, 2003, in US District Court for the Eastern District of New York before Judge John Gleeson. Under the settlements, Visa is set to pay $2.025 billion to merchants over the next 10 years and MasterCard is set to pay $1.025 billion over the same period. By December 22, 2003, Visa and MasterCard must pay $350 million to the settlement fund and then pay $300 million every year for the next nine years. According to the American Bar Association, the $3.05 billion total settlement is the largest ever in an antitrust case. Lloyd Constantine, a principle in the New York firm Constantine & Partners, the lead counsel for the merchants, says "The changes in Visa and MasterCard's business practices, beginning August 1, will bring even larger economic benefits for merchants as offline debit interchange fees drop. In the long run, this settlement offers more choice and more competitive pricing for merchants and consumers." The agreements also state that Visa and MasterCard will lower fees on offline signature debit card transactions beginning August 1, 2003, saving merchants as much as $1 billion for the remainder of this year. As of January 1, 2004, merchants will no longer be forced to comply with the credit card associations' tying arrangements that required them to accept all Visa and MasterCard debit card products if they accepted the associations' credit cards. "This settlement will expand consumers' payment choices. For more than a decade Visa, MasterCard and their member/owner banks have suppressed the faster, safer and less expensive online PIN debit transactions," Mr. Constantine said. "Once the terms of the settlements have been fully approved and implemented, consumers will be able to freely choose the way they pay without economic coercion, which Visa and MasterCard have used against consumers and merchants." While the terms of the settlements call for payments over ten years, both Visa and MasterCard have agreed to cooperate in an effort to secure financing to allow all payments to be made to merchants over the next year. "This process would save a significant amount in administrative costs, upwards of $100 million, so we expect that the total of the payments that merchants would receive over the next year would be worth significantly more than the total they would have received in 10 checks over nine years," said Mr. Constantine. "The payout to merchants will be easy, fair, and equitable. The payment amount will be based on a merchant's volume of debit and credit card transactions between October 25, 1992 and July 31, 2003, the day before the new off-line debit pricing is to go into effect," Mr. Constantine continued. Visa and MasterCard have agreed to make their transaction database available so that notice and the allocation of payments to merchants will be completed quickly, cost effectively, and accurately. "In effect, this will mean most merchants will be able to receive a claim with minimal paperwork, and need to do nothing until they receive a claim form in the mail after final approval," Mr. Constantine said. "If a merchant questions the payment they will be able to complete a more detailed form to ensure that they receive the proper payment." The certified class consists of all persons and business entities that have accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa and/or MasterCard offline signature debit transactions from October 25, 1992 to the present. Members of the class were given notice of pendency and an opportunity to opt-out of the case in September, October and November of 2002. New Merchants -- i.e., those who first began accepting Visa and/or MasterCard credit and debit cards for payment after June 21, 2002 -- have the right to exclude themselves from the class by filing a request for exclusion by September 5, 2003. All class members have the right to object to the settlements by September 5, 2003 and to appear at the fairness hearing on September 25, 2003. For more details, contact The Garden City Group, Inc. by Mail: PO Box 9000-6014, Merrick, NY 11566.; attn. In Re Visa Check/MasterMoney Antitrust Litigation by Phone: 1-888-641-4437 or by E-mail: admin@InReVisaCheck- MasterMoneyAntitrustLitigation.com DOW CHEMICAL: Court To Rule on Certification For Residents' Suit ---------------------------------------------------------------- The Saginaw County Circuit Court in Michigan will consider the dismissal of a lawsuit demanding that Dow Chemical Co. pay for medical tests, over dioxins that allegedly contaminated the land, the Bay City Times reports. Michigan residents filed a suit in March alleging that dioxin has led to declining property values and threatened their health. The Company allegedly polluted their homes and back yards. State officials also labeled the floodplain as a "hazardous waste facility" because of its dioxin contamination. The suit seeks payments for lost property value, diagnostic medical testing, punitive damages and a trust fund that would pay for medical care and dioxin research. Dow officials have called the suit baseless, the Bay City Times reports. The company submitted a response saying there is no proof that excessive dioxin levels exist in the plaintiffs' yards or caused health problems. Company attorneys argued no legal precedent exists that would force Dow to cover the expense of testing. "There is law in the state of Michigan. Plaintiffs are asking you to go beyond it," Doug Kurtenbach, Dow's Chicago-based attorney, argued, according to a Times report. "You should not." Jan P. Helder, attorney for 225 property owners in the Tittabawassee River floodplain who have sued Dow, accused company officials of trying to minimize health concerns. "They know better. They know dioxin is a highly dangerous substance," Mr. Helder said. "They are trying to use the law as something they can hide behind." FAX.COM: CA Attorney General Files Civil Suit For Unwanted Faxes ---------------------------------------------------------------- Fax broadcaster Fax.com faces a federal civil complaint filed by California Attorney General William Lockyer, charging the company with junk-fax violations and seeking millions in penalties and damages, DMNews reports. The suit charges the Company with violating state law and the federal Telephone Consumer Protection Act (TCPA) by sending unsolicited commercial faxes and pre-recorded phone messages. The Company allegedly committed violations of unfair competition and misleading advertising laws. The suit is the latest among several state complaints filed against the Company. The largest civil suit came from Silicon Valley entrepreneur Steve Kirsch, co-founder of the Infoseek Internet search engine and current president of Propel software. In August 2002, Mr. Kirsch filed a $2.2 trillion lawsuit against Fax.com. Mr. Kirsch's case and all other fax cases in state court in California are on hold pending a state court of appeals decision regarding the right for private citizens to sue under the TCPA. An Orange County, CA, judge recently dismissed a consumer class-action case against Fax.com after agreeing with the company's contention that the state must pass a law "opting in" to the federal statute before consumers can sue, DMNews.com reports. Fax.com representatives did not respond to a call for comment yesterday, DMNews.com reports. FLORIDA: 18 Charged With Prescription Drug Racketeering, Fraud -------------------------------------------------------------- Florida Attorney General Charlie Crist and Statewide Prosecutor Peter Williams today announced the indictment of nineteen individuals by the Seventeenth Statewide Grand Jury for crimes associated with adulterated prescription drugs. "These individuals have participated in some of the most heinous acts possible," said Atty. General Crist. "Our most ill citizens - cancer and AIDS patients - depend on these drugs for their very lives." The Grand Jury issued two indictments last Thursday, following an investigation that began in January 2002 involving the teamwork of the Attorney General's Office of Statewide Prosecution, the Florida Department of Law Enforcement, the Broward County State Attorney's Office, the Miami-Dade Police Department and the Florida Department of Health. The first indictment charges Michael Carlow and 17 co- conspirators with various crimes associated with selling to the wholesale market adulterated, relabeled, stolen, illegally imported and improperly stored prescription drugs. The charges vary by individual and include: (1) racketeering, (2) conspiracy to commit racketeering, (3) organized scheme to defraud, (4) grand theft, (5) sale or delivery of a controlled substance, (6) possession with intent to sell prescription drugs, (7) purchase or receipt of a prescription drug from unauthorized person Prescription drugs used in these activities include: (i) Neupogen - used for cancer and HIV patients; (ii) Gammagard (Gamimune, Iveegam and Panglobulin) - used for HIV patients; (iii) Epogen (Procrit) - used for cancer and AIDS patients; and (iv) Lipitor - used to lower blood cholesterol Others indicted in these activities are Candace Carlow, Thomas Atkins Jr., Marilyn Atkins, Henry Garcia, Fabian Diaz, Joel De La Osa, David Ebanks, Jose L. Benitez, Dariel Tabares, Michael Burman, Lazaro Vilarchao, Ivan Vilarchao, Joseph Villanueva, Arturo Godinez, Tom Martino, Julio Cesar Cruz and Gisela Gonzalez. The second indictment charges Jose Grillo with one count of an unauthorized scheme to defraud and 18 felony counts involving the unauthorized receipt or sale of prescription drugs. Mr. Grillo allegedly relabeled the drug Epogen (Procrit), used to treat seriously ill cancer and AIDS patients, to indicate strength 20 times stronger and thereby selling it for a higher price. Penalties these individuals will face range from 5 to 30 years in prison for each count. The ill-gotten gains from their activities are estimated to be in the tens of millions of dollars. Prosecution of those charged will be handled by the Attorney General's Office of Statewide Prosecutor. Joining Mr. Crist and Mr. Williams at a news conference in Ft. Lauderdale were Daryl McLaughlin, Interim Commissioner of FDLE, and Dr. John O. Agwunobi, Secretary of the Department of Health. "This group has been diverting critical and costly prescription medications that are critical to the health of individuals suffering from serious illnesses," said Mr. McLaughlin. "This case could not have moved forward without the dedicated teamwork by all agencies involved." "I would like to personally thank Governor Jeb Bush for his commitment to ensuring Florida's residents and visitors are receiving safe, unadulterated prescription drugs," said Dr. Agwunobi. Atty. General Crist also announced that future penalties for these crimes will be more severe thanks to the Florida Legislature's passage of new legislation, which Governor Bush signed into law. For crimes of this nature that occur after July 1, 2003, the penalty can be up to life in prison. "With the recent legislation he signed into law, Florida now has the toughest and clearest prescription drug regulation of any state in the nation," said Dr. Agwunobi. GREEN TREE: Agrees To Settle MN Securities Lawsuit For $12.5M ------------------------------------------------------------- Green Tree Financial Corporation reached a preliminary $12.5 million settlement of a securities class action filed in the United States District Court in Minnesota, charging the Company and some former officials by conspiring to artificially inflate the Company's stock and to boost the former CEO's compensation in 1996, the Pioneer Press reports. Several suits were filed since 1997, charging the Company with exaggerated earnings for 1996 and the first nine months of 1997, allowing former chief executive Larry Coss to reap a $102 million bonus - mostly stock - in 1996. Mr. Coss left the company in 1998 when insurance company Conseco Inc. bought Green Tree, changing its name to Conseco Finance Corporation. The suit further charged the Company with engaging in used questionable accounting practices, changing its prepayment assumptions internally without disclosing those to the public. The Company issued a surprise notice in November 1997 that they would take a $125 million to $150 million charge because customers were prepaying mobile home loans faster than expected as interest rates fell. Investors saw their stock value reduced in half. The consumer lender and its former officials did not admit to or deny any wrongdoing, according to documents filed last week in US Bankruptcy Court in Chicago. A July 28 hearing has been scheduled for the bankruptcy court to approve the settlement, the Pioneer Press reports. The settlement covers investors who bought Green Tree common stock or bought or sold Green Tree common stock options between July 15, 1995, and January 27, 1998. HOME DEPOT: FL Court Refuses to Certify CCA-Treated Wood Lawsuit ---------------------------------------------------------------- The United States District Court for South Florida refused to certify as a class action a lawsuit against Home Depot for selling wood treated with chromated copper arsenate, the Washington Times reports. In February 2003, the suit was filed against several manufacturers and retailers of CCA-treated wood. During oral arguments, however, plaintiffs admitted only a handful of personal injuries have been filed over CCA-related incidents. The court later dismissed all defendants, except Home Depot. In a strongly worded opinion, Judge Donald Middlebrooks said a class action "would be futile." Jim Hale, executive director of the Wood Preservative Science Council, told the Washington Times this decision is a severe blow to those who have been trying to make CCA "the next asbestos, and to alarm the public to a threat which simply does not exist." I2 TECHNOLOGIES: Investors Commence Securities Suits in N.D. TX --------------------------------------------------------------- I2 Technologies, Inc. and certain of its current and former officers and directors face several securities class actions filed in the United States District Court for the Northern District of Texas (Dallas Division). The complaints bring claims under the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, relating to the Company's announcements that it would re-audit certain of its consolidated financial statements and that there would be material adjustments to its financial statements. Specifically, these actions allege that the Company issued a series of false or misleading statements to the market during the class period that failed to disclose that: (1) the Company had materially overstated its revenue by improperly recognizing revenue on certain customer contracts; (2) the Company lacked adequate internal controls and were therefore unable to ascertain its true financial condition; and (3) as a result of the foregoing, the Company's financial statements issued during the class period were materially false and misleading. Plaintiffs contend that such statements caused the Company's stock price to be artificially inflated. The complaints seek unspecified damages on behalf of a purported class of purchasers of the Company's common stock during the period from April 18, 2000 to January 24, 2003. Based on the stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of this matter. I2 TECHNOLOGIES: Faces Shareholder Derivative Suits in N.D. TX --------------------------------------------------------------- I2 Technologies, Inc. and certain of its officers and directors face two purported shareholder derivative filed in the United States District Court for the Northern District of Texas (Dallas Division). The suits claim that certain of the Company's officers and directors breached their fiduciary duties to the company and its stockholders by: (1) causing the company to improperly recognize revenue in violation of generally accepted accounting principles to artificially inflate the Company's stock price in order to complete acquisitions in which Company stock was used as consideration, and (2) selling shares of the company's common stock while in possession of material adverse non-public information regarding the Company's financial statements and securing personal loans using its allegedly artificially inflated stock price. As stated, the complaints are derivative in nature and do not seek relief from the company. However, the Company has entered into indemnification agreements in the ordinary course of business with certain of the defendant officers and directors and may be obligated throughout the pendency of these actions to advance payment of legal fees and costs incurred by the defendants pursuant to the Company's obligations under the indemnification agreements and/or applicable Delaware law. Based on the stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of these matters. I2 TECHNOLOGIES: Faces Shareholder Derivative Lawsuit in N.D. TX ---------------------------------------------------------------- I2 Technologies, Inc. faces a purported shareholder derivative lawsuit was filed in the United States District Court for the Northern District of Texas (Dallas Division), along with its current Chief Executive Officer, Chief Financial Officer and directors. The suit claims that the Company's Chief Executive Officer and Chief Financial Officer violated section 304 of the Sarbanes- Oxley Act of 2003 and seeks to recover from them bonuses and equity-based compensation, and profits realized from sales of securities of the company. The suit also names the Company's current directors for failing to seek recovery of the aforementioned bonuses, equity-based compensation and trading profits. As stated, the complaint is derivative in nature and does not seek relief from the company. However, the Company has entered into indemnification agreements in the ordinary course of business with its Chief Executive Officer, Chief Financial Officer and directors and it may be obligated throughout the pendency of this action to advance payment of legal fees and costs incurred by the defendants pursuant to its obligations under the indemnification agreements and/or applicable Delaware law. Based on the stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of this matter. I2 TECHNOLOGIES: Plaintiffs Appeal Dismissal of Derivative Suit --------------------------------------------------------------- Plaintiffs appealed the dismissal of the shareholder derivative lawsuit filed against I2 Technologies, Inc. and certain of its officers and directors in the United States District Court for the Northern District of Texas, Dallas Division. The suit claims that certain of the Company's officers and directors breached their fiduciary duties to the company and its stockholders by selling shares of our common stock while in possession of material adverse non-public information regarding our business and prospects, and disseminating inaccurate information regarding the Company's business and prospects to the market and/or failing to correct such inaccurate information. As stated, the complaint is derivative in nature and does not seek relief from the Company. However, the Company has entered into indemnification agreements in the ordinary course of business with certain of the defendant officers and directors and may be obligated throughout the pendency of this action to advance payment of legal fees and costs incurred by the defendants pursuant to the Company's obligations under the indemnification agreements and/or applicable Delaware law. The Company filed a motion to dismiss the action on February 19, 2002 and the court later granted the motion. Plaintiffs have appealed the decision. Based on the stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of this matter. IDAHO: Agriculture Director Says No Alternative to Field-Burning ---------------------------------------------------------------- Idaho Department of Agriculture Director Patrick Takasugi says there's no economically viable alternative to field burning - an announcement that clears the way of thousands of grass fields to be burned this year, kxly.com reports. The department's decision was required under a new state law that protects farmers from litigation as long as they follow state regulations such as burning only on days when regulators say wind conditions are favorable. Mr. Takasugi reviewed 48 documents before making the decision. Seattle Attorney Steve Berman, who represents north Idaho residents in a class action lawsuit against growers, told kxly.com thousands of area residents could suffer irreparable injury if the practice continues. L90 INC.: Agrees To Settle For $5M Securities Lawsuit in C.D. CA ---------------------------------------------------------------- L90, Inc. reached an agreement in principle with plaintiff in the consolidated securities class action filed against it and certain of its former officers and directors in the United States District Court for the Central District of California. Several suits were filed following the announcement of the Securities and Exchange Commission investigation and the internal investigation by the Audit Committee of the Board of Directors. These suits were later consolidated. The suit alleges that during 2000 and 2001 the Company, and the other named defendants, made false or misleading statements of material fact about the Company's financial statements, including its revenue, revenue recognition policies, business operations and prospects for the years 2000, 2001 and beyond. The complaints seek an unspecified amount of damages on behalf of persons who purchased the Company's common stock during the purported class period. On March 18, 2003 the court granted the Company's motion to dismiss the consolidated lawsuit for failure to state a claim upon which any relief may be granted and the consolidated class action lawsuit was dismissed without prejudice. Because the lawsuit was dismissed without prejudice, plaintiffs have an opportunity to amend the complaint against the defendants. The Company has reached an agreement in principle with the lead plaintiff to settle the class action for approximately $5.0 million. Final terms of the settlement are still under negotiation and are subject to certain terms and conditions, including court approval. L90 INC.: Plaintiffs Ask CA Court To Allow Appeal of Dismissal -------------------------------------------------------------- Plaintiffs in a securities class action initially filed against Homestore.com, Inc. asked the United States District Court for the Central District of California for permission to file an interlocutory appeal of L90, Inc.'s dismissal as a defendant in the suit. The complaint generally alleges that L90 knowingly participated in Homestore's scheme to defraud the investing public by entering into improper transactions with Homestore in the second and third quarters of 2001. The complaints seek an unspecified amount of damages on behalf of persons who purchased Homestore.com's common stock during the purported class period. In March 2003, the lawsuit was dismissed with prejudice with respect to the Company and it was not required to pay any damages. On April 14, 2003, the lead plaintiff in the case filed a motion for certification to gain the court's permission to pursue an interlocutory appeal of the court's dismissal of the claims against the Company. The Company intends to oppose the motion for certification of the interlocutory appeal. L90 INC.: Reaches Settlement For CA Shareholder Derivative Suits ---------------------------------------------------------------- L90 Inc. reached a settlement agreement for two derivative lawsuits filed against it (as a nominal defendant) and certain of the Company's current and former officers and directors in the Superior Court of the State of California for the County of Los Angeles. The derivative complaints allege that certain of the Company's current and former officers and directors breached their fiduciary duties to the Company, engaged in abuses of their control of the Company, wasted corporate assets, and grossly mismanaged the Company. The plaintiffs sought unspecified damages on the Company's behalf from each of the defendants. In April 2003, the Company settled these derivative actions for $775,000 in attorneys' fees and the Company's agreement to adopt certain corporate therapeutic actions. The Company has received insurance proceeds sufficient to satisfy the $775,000 to be paid by it in settlement of the derivative suits. SILICON LABORATORIES: Plaintiffs Push MOU To Settle Stock Suits --------------------------------------------------------------- Plaintiffs proposed a memorandum of understanding to settle a consolidated securities class action filed against Silicon Laboratories, Inc., four officers individually and the three investment banking firms who served as representatives of the underwriters in connection with the Company's initial public offering of common stock which became effective on March 23, 2000. The suit alleges that the registration statement and prospectus for the Company's initial public offering did not disclose that the underwriters solicited and received additional, excessive and undisclosed commissions from certain investors, and the underwriters had agreed to allocate shares of the offering in exchange for a commitment from the customers to purchase additional shares in the aftermarket at pre-determined higher prices. The action seeks damages in an unspecified amount and is being coordinated with approximately 300 other nearly identical actions filed against other companies. On July 15, 2002, the Company moved to dismiss all claims against it and the individual defendants. A court order dated October 9, 2002 dismissed without prejudice numerous individual defendants, including the four officers of the Company who had been named individually. On February 19, 2003, the court denied the motion to dismiss the complaint against the Company. The plaintiff class has proposed a Memorandum of Understanding (MOU) and related agreements which set forth the terms of a proposed settlement between the plaintiff class and the Company and the other approximately 300 defendants. It is anticipated that any potential financial obligation of the Company to plaintiffs due pursuant to the terms of the MOU and related agreements would be covered by existing insurance. Therefore, the Company does not expect that the proposed settlement would involve any payment by the Company. The MOU and related agreements are subject to a number of contingencies, including the approval of the MOU by a sufficient number of the other approximately 300 defendants, the negotiation of a final settlement agreement, and approval of the settlement by the court. The Company cannot be certain as to whether or when a settlement will occur or be finalized and is unable at this time to determine whether the outcome of the litigation will have a material impact on its results of operations or financial condition in any future period. SUNOCO INC.: Judge Grants Certification To Civil Rights Lawsuit --------------------------------------------------------------- US District Judge Clifford Scott Green has approved class action status for a civil rights lawsuit filed against Sunoco Inc. by black professionals who say they were unfairly denied promotions, the Associated Press Newswires reports. Judge Green said the plaintiffs' analysis of Sunoco's employment statistics is enough to certify the class, which can include employees dating back to January 1, 1996. "This is a classic glass-ceiling case," said Martin J. D'Urso, who is among the lawyers representing DeWayne Ketchum and five other current and former employees who had initially filed the lawsuit. Sunoco spokesman Gerald Davis said company officials will meet with lawyers to decide how to respond to the ruling. The company could appeal to the 3rd US Circuit Court of Appeals. TRILLIUM BANQUET: Faces Suit For Students Infected With E. Coli --------------------------------------------------------------- The Trillium Banquet Hall and Convention Centre in Ontario, Canada faces a possible multi-million dollar class action filed by nearly 90 students who contracted an E. coli infection there last month, the Mississauga News reports. 90 students and their families from E.C. Drury High School fell ill from eating food at the banquet hall during their prom on June 25. The suit will be brought on behalf of Jennifer O'Neill, one of the students who suffered E. coli poisoning. Lawyer for the plaintiffs Sharon Strosberg told News Friday Ms. O'Neill suffered cramps and bloody diarrhea. She hasn't gone back to work since falling ill, as she works in the deli department at Loblaws. She has been ordered to stay home as part of a public health order that anyone who became sick with E. coli and works in the food service or day care industries not return to work until they've been cleared to do so. Ms. Strosberg told The News Friday the suit could be filed in an Ontario Superior Court of Justice as early as Monday. "(My clients) realize that a wrong has been done to them and they deserve to be compensated for that," she said. "I think the reason (we're going forward with the lawsuit) is obvious, but I don't want to talk about it much," Bill O'Neill, Jennifer's father, told News Friday. "(Jennifer) is doing better now, but she is still not 100 per cent." Peel health officials traced the source of the infection to the meal served at the banquet hall after a two-week investigation. Peel's public health department has also reported five confirmed cases of E. coli poisoning in people who attended three other events at the Trillium Banquet Hall around the same time. Helen Vivra, part owner of the hall, told the Mississauga News she didn't "know anything about a lawsuit." The hall remains open for business, but public health officials have ordered that food be prepared off-site. UNITED STATES: CA Group Speaks Out Against Class Action Abuse ------------------------------------------------------------- The Citizens Against Lawsuit Abuse (CALA) groups throughout California convened outside the national convention of the Association of Trial Lawyers of America in San Francisco to protest and raise public awareness about the impact frivolous litigation and unfounded class action lawsuits have had on America's healthcare delivery system. The protest is part of a national campaign, "Lawsuit Abuse Makes Us Sick," which is designed to educate consumers about how frivolous and excessive healthcare litigation is raising costs for prescription drugs, health coverage and doctor visits, while also jeopardizing access to medical products and treatments. "We're here today to tell the story of people like Titus Simonini," said Maryann Maloney, executive director of Orange County Citizens Against Lawsuit Abuse. "Titus has hydrocephalus, and needs a silicon brain shunt to survive. But because of junk science lawsuits against silicon manufacturers, fewer companies are willing to manufacture the shunts that keep him alive. Now, Titus and his mother are very concerned about the future." Titus' problem is not unique, Ms. Maloney adds. According to a study by New York-based Arnoff Associates, each year over 7.5 million lives in America are either saved by or improved through implantable medical devices or products like pacemakers and stents. Yet, due to the threat of liability, 75% of suppliers of biomaterials used to make medical implants banned sales to US manufacturers. Although the Biomaterials Assurance Assistance Act of 2000 aimed to remedy this by providing important legal protections to suppliers in liability lawsuits, numerous medical device producers choose to remain overseas. "Litigation is also a major threat to our access to care," Ms. Maloney says. "It's an accepted fact that litigation raises costs. When litigation forces healthcare costs to rise, the natural result is an increase in the cost of coverage. Unfortunately as the cost of coverage rises, so do the number of uninsured." According to a study published in the Journal of Health Economics, every ten percent increase in the cost of insurance creates a three to four percent decrease in the number of people who choose to purchase coverage. "You don't have to be an economist to know that when people can't afford coverage, they can't afford care. When they can't get care, they just get sicker," Ms. Maloney said. "Already more than 40 million Americans have no health coverage, and that will only get worse if healthcare litigation is not brought under control." Ms. Maloney says that form of control could come from legislative reforms that would remove the "jackpot mentality" from the civil justice system and ensure greater predictability, fairness and balance. According to a recent study by the US Department of Health and Human Services, simply limiting "unreasonable" jury awards could cut health care costs by five to nine percent, saving $70 - $126 billion each year and allowing an additional 2.4 - 4.3 million Americans to obtain medical insurance. "America is facing a health care crisis," Ms. Maloney said. "Lawsuit abuse threatens our healthcare system and jeopardizes our ability to access what should be the finest health care in the world. Our legal system is in desperate need of fundamental reform." For more details, contact Citizens Against Lawsuit Abuse - Ms. Maryann Maloney by Phone: 714/259-8400 UTAH: Legislature Cuts Foster-Care Review Board's Budget In Half ---------------------------------------------------------------- The Utah state program that reviews individual foster care cases had its budget cut in half by Utah's Legislature and now expects to be able to review only half the cases, the Associated Press Newswires reports. Some legislators believe the Foster Care Citizens Review Board is an unnecessary duplication of effort because the courts and the state's Division of Child and Family Services (DCFS) already conduct foster care reviews. A class action filed a decade ago claimed the state was not properly caring for children in state custody and was actually endangering them. The outcome of the class action was that Utah remains under federal court oversight, and some improvements have been made. Review board members say they have been an integral part of those improvements, and efforts to drop the board will erode the progress that has been made. Board director Patricia Worthington said in response to legislators' charge that the board is an "unnecessary duplication" that, "The review board does not overlap. It deals directly with the children and foster parents involved and (discovers) how things are working on the front line." There are about 2,000 children in state custody at any given time in Utah. The board has had a goal of reviewing every child's case every year. DCFS Director Richard Anderson said he is convinced the citizens review board has made a difference. Mr. Anderson said further efforts to cut it would harm one of the most effective volunteer organizations in the state. WOODWARD GOVERNOR: Employees File Race Discrimination Suit in IL ---------------------------------------------------------------- Woodward Governor faces a racial discrimination class action filed by sixteen former and current employees in the United States District Court in Rockford, Illinois, the Rockford Register Star reports. The $1 million suit alleges the Company does not pay or promote minorities as much as their white counterparts. The suit specifically claims that the Company had a racially hostile work environment. The suit also says supervisors spoke references to derogatory racial comments in the workplace, including: (1) the term "African engineering," which referred to flaws made in the design process; (2) a comment that a dark-skinned employee "forgot to wash his face in the morning;" (3) the statement, "If your people continue like this, they'll be back in slavery." "One of the red flags is how the company is doing at hiring and promoting minorities," lawyer Jennifer Soule, who represents the one Asian, one Hispanic and 14 black workers in the class told the Rockford Register Star. In a statement, the Company acknowledged the suit and said it has "fully met our obligations under the law." "Because of the nature of these proceedings, it is not appropriate for us to comment further at this time concerning the details of the charges or our specific defenses to them," the statement read. "Woodward is committed to equal opportunity. We look forward to presenting our position before both the EEOC and the U.S. District Court." "I think this case is a strong one," Ms. Soule told the Star. "I'm not comfortable comparing it to other cases, but we think it has merit." New Securities Fraud Cases ADMINISTAFF INC.: Marc Henzel Lodges Securities Suit in S.D. TX --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Texas, Houston Division, on behalf of purchasers of Administaff, Inc. (NYSE: ASF) publicly traded securities during the period between April 3, 2001 to July 31, 2002, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 3, 2001 and July 31, 2002, thereby artificially inflating the price of Administaff securities. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that Administaff had inadequate and deficient pricing and billing systems and was incorrectly calibrating pricing for clients that experienced declines in average payroll cost per worksite employee; (2) that Administaff was incorrectly matching the price and cost for health insurance on new and renewing client contracts; and (3) that, in violation of Generally Accepted Accounting Practices and in order to retain its coveted place on the Fortune 500 listing, Administaff was improperly recognizing revenue by failing to net Administaff's worksite employee payroll costs against revenues. On August 1, 2002, before the open of trading, Administaff shocked the investing public when it released its financial and operational results for the second quarter ended June 30, 2002, reporting "a net loss and diluted net loss per share of $3.2 million and $0.11" as compared to Thomson Financial/First Call estimates of $0.04 earnings per share. Market reaction was swift and negative, with Administaff stock falling from a close of $7.50 on July 31, 2002 to a close of $4.20 on August 1, 2002, or a single-day decline of 44% in heavy trading. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com CENTRAL PARKING: Marc Henzel Files Securities Lawsuit in M.D. TN ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Middle District of Tennessee, Nashville Division, on behalf of all purchasers of the common stock of Central Parking Corporation (NYSE: CPC) from November 4, 2002 through February 13, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 4, 2002 and February 13, 2003, thereby artificially inflating the price of Central Parking common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company's internal controls were inadequate to record and document the Company's financial results; (2) that the Company was materially understating its bad debt reserve, thereby overstating its earnings; (3) that the Company was materially understating its accounts payable, thereby overstating its financial condition; and (4) as a result of the foregoing, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles and, therefore, were materially false and misleading. On February 14, 2003, Central Parking shocked the market when it announced that it would be taking a charge to increase its bad debt reserve and that it would be taking a charge to increase its accounts payables. In response to this announcement, the price of Central Parking common stock dropped from $15.82 on February 13, 2003 to a close of $12.31 on February 14, 2003, or a single-day decline of more than 22%, on more than seven times normal trading volume. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com CROMPTON CORPORATION: Brodsky & Smith Lodges CA Securities Suit --------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who purchased the common stock and other securities of Crompton Corporation (NYSE:CK), including those former Crompton & Knowles and Witco shareholders who exchanged their shares of stock for CK Witco stock pursuant to the merger during the period between October 26, 1998 and October 8, 2002 inclusive. The class action lawsuit was filed against the Company and certain of its current and/or former officers and/or directors in the United States District Court for the Northern District of California. The complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Crompton securities. Specifically, while shares of Crompton traded at the inflated prices, the Company was able to refinance its debt and consummate a major acquisition using its inflated securities as currency. For more details, contact Marc L. Ackerman or Evan J. Smith by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by E-mail: clients@brodsky-smith.com CROMPTON CORPORATION: Marc Henzel Lodges Securities Suit in CA -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Crompton Corporation (NYSE: CK) publicly traded securities, including former Crompton & Knowles and Witco shareholders who exchanged their shares of stock for CK Witco stock pursuant to the merger during the period between October 26, 1998 and October 8, 2002). The complaint charges Crompton and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Crompton manufactures and markets a wide variety of polymer and specialty products. The complaint alleges that during the Class Period, defendants caused Crompton's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by: (1) agreeing to charge prices at certain levels and otherwise to fix, increase, maintain or stabilize prices of rubber chemicals sold in the United States; (2) selling rubber chemicals at the agreed upon prices; and (3) inflating their profits via the above acts. As a result, the Company's shares traded at inflated prices enabling the Company to refinance its debt and consummate a major acquisition using its inflated securities as currency. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com CROMPTON CORPORATION: Charles Piven Lodges Securities Suit in CA ---------------------------------------------------------------- Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired Crompton Corporation (NYSE:CK) publicly traded securities, including former Crompton & Knowles and Witco shareholders who exchanged their shares of stock for CK Witco stock pursuant to the merger during the period between October 26, 1998 and October 8, 2002. The case is pending in the United States District Court for the Northern District of California against Crompton Corporation and certain of its current and/or former officers and/or directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com GUIDANT CORPORATION: Marc Henzel Launches Securities Suit in IN --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Indiana on behalf of all persons who purchased or acquired Guidant Corporation (NYSE: GDT) securities between August 17, 2001 and June 12, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 17, 2001 and June 12, 2003, thereby artificially inflating the price of Guidant securities. The complaint alleges that the Company's ANCURE ENDOGRAFT System (used to prevent an aneurysm in the heart's main artery from rupturing) was not safe and that it was the cause of over 2,600 incidents that included 12 deaths; the Company failed to notify the FDA regarding the over 2,600 incidents that included 12 deaths resulting from the defective ANCURE ENDOGRAFT System; and the Company engaged in fraudulent sales of the ANCURE ENDOGRAFT System. On June 12, 2003, the Company agreed to plead guilty to federal charges and to pay $92.4 million for misleading regulators about 12 deaths and serious injuries linked to the ANCURE ENDOGRAFT System. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com LABORATORY CORPORATION: Charles Piven Files Stock Lawsuit in NC --------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Laboratory Corporation of America Holdings (NYSE:LH) between February 13, 2002 and October 3, 2002, inclusive. The case is pending in the United States District Court for the Middle District of North Carolina against the Company and certain of its executive officers. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com READ-RITE CORPORATION: Wechsler Harwood Files CA Securities Suit ---------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action against Alan S. Lowe and Andrew C. Holcomb, respectively the Chief Executive Officer and Chief Financial Officer of Read-Rite Corporation (NasdaqNM:RDRTQ) in the United States District Court for the Northern District California on behalf of all persons or entities who purchased Read-Rite stock between October 30, 2001 and June 17, 2003 inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission by issuing a series of material misrepresentations about the financial condition of Read-Rite in order to materially inflate the stock price, obtain a stream of capital to keep the Company operational, and maintain the lucrative salaries received by defendants. The complaint alleges that the defendants released financial statements that were in violation of Generally Accepted Accounting Principles (GAAP). On June 17, 2003, Read-Rite stunned the market when it disclosed that it would seek bankruptcy protection under Chapter 7. For more details, contact Craig Lowther by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: (877) 935-7400 x-283 or by E-mail: clowther@whesq.com SINGING MACHINE: Vianale & Vianale Lodges Securities Suit in FL --------------------------------------------------------------- Vianale & Vianale LLP filed a securities class action lawsuit on behalf of investors who purchased the securities of The Singing Machine Company, Inc. (AMEX:SMD) during the class period February 14, 2001 and June 27, 2003 in the United States District Court for Southern District of Florida. The lawsuit alleges that defendants artificially inflated the price of The Singing Machine's securities during the class period by issuing materially false and misleading financial statements. Specifically, the lawsuit alleges defendants repeatedly issued financial statements that did not account for the Company's probable liability for Hong Kong income taxes. Defendants, however, had no basis to claim they would receive any tax exemption from Hong Kong authorities, and should have appropriately reserved for the tax payments. On June 27, 2003, the Company revealed that it would seek an extension to file its Annual Report on Form 10-K for fiscal 2003 and that it would restate its fiscal 2002 and possibly 2001 financial statements. The restatement was prompted by the Company's admission of a need to increase an accrual for income taxes that may be payable to Hong Kong authorities. The stock price dropped 33% on the news. The Company's auditor is also named as a defendant in the suit. For more details, contact Kenneth J. Vianale or Julie Prag Vianale by Mail: 5355 Town Center Road, Suite 801, Boca Raton, Florida 33486 by Phone: 1-888-657-9960 or 561-391-4900 or by E- mail: info@vianalelaw.com STOCKWALK INC.: Zimmerman Reed Launches Securities Lawsuit in MN ---------------------------------------------------------------- Zimmerman Reed PLLP initiated a securities class action in the United States District Court for the District of Minnesota on behalf of persons who purchased the common stock of Stockwalk on the open market from May 8, 2001 through September 25, 2001. At the time, the stock was trading on the Nasdaq Exchange under the symbol STOK. It has now been de-listed. The shareholder bringing the lawsuit is a resident of Faribault, Minnesota who purchased Stockwalk securities during the class period on the open market. The complaint alleges that certain former officers of Stockwalk issued materially false statements and omitted material facts concerning Stockwalk's financial condition during the class period. Generally, defendants represented that Stockwalk's internal controls were sufficiently adequate to permit the issuance of a report on the company's financials statements for the period ending March 31, 2001, that the company was not in violation of certain net capital requirements and that the company was not at risk with respect to its stock lending activities. The complaint alleges that purchasers of Stockwalk securities were unaware that a significant activity that the company was engaged in was stock lending. The complaint also asserts that Defendant Ernst & Young lacked independence in conducting its auditing and accounting activities, was negligent in performing its services and should have objected to the issuance in June and July 2001, of its prior, unqualified opinion on the March 31, 2001 financial statements. For more details, contact Robert C. Moilanen or Carolyn G. Anderson by Phone: 800-755-0098 or 612-341-0400 ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. 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